8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 26, 2007 

Cowlitz Bancorporation
(Exact Name of Registrant as specified in its charter)

Washington	0-23881	91 - 529841
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
incorporation)

927 Commerce Ave.
Longview, Washington 98632
Address of Principal Executive Office and Zip Code

Registrant's telephone number including area code 360-423-9800

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

Item 2.02        Results of Operations and Financial Condition.

     On April 26, 2007, Cowlitz Bancorporation issued a press release announcing financial results for the first quarter of 2007. A copy of the press release is attached as Exhibit 99.1.

Item 9.01	Financial Statements and Exhibits.
	(a)	Not applicable.
	(b)	Not applicable.
	(c)	Exhibits.
		99.1 Press Release

SIGNATURES 

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			COWLITZ BANCORPORATION (Registrant)
Date:	April 26, 2007	By:	/s/ Gerald L. Brickey
			Gerald L. Brickey, Chief Financial Officer

EX-99.1

EXHIBIT 99.1

April 26, 2007 12:00 p.m. Pacific Time

Company Press Release

SOURCE:
CONTACTS: Cowlitz Bancorporation
Richard J. Fitzpatrick, Chief Executive Officer
Gerald L. Brickey, Chief Financial Officer
(360) 423-9800

Cowlitz Bancorporation Reports First Quarter 2007 Earnings of $1,278,000, Up 21% From First Quarter 2006

LONGVIEW, Wash., April 26, 2007 /PRNewswire/ --

FlashResults
Cowlitz Bancorporation (NASDAQ: CWLZ)
(Numbers in Thousands, Except Per Share Data)

		Three Months Ended
	March 31,
		2007	2006	% Change
Net Interest Income		$5,752	$4,763	21	%
Net Income		$1,278	$1,060	21	%
Diluted EPS		$0.25	$0.21	19	%
Total Period End Loans		$366,029	$287,348	27	%
Total Period End Deposits		$394,047	$321,732	22	%

Cowlitz Bancorporation (NASDAQ: CWLZ - news) today reported net income of $1,278,000 or $0.25 per diluted share for the first quarter of 2007, compared with net income of $1,060,000, or $0.21 per diluted share, during the same period of 2006. Net income for the first quarter of 2007 was up 21% over the same period last year and earnings per share on a fully diluted basis increased 19%.

“We see continuing loan demand and increasing non-interest revenues,” said Richard J. Fitzpatrick, President and CEO of Cowlitz Bancorporation and its wholly-owned subsidiary, Cowlitz Bank. “The strong growth rates in the Puget Sound and Portland/Vancouver markets should help mitigate the effects of the current slowdown in the real estate sector.”

Total loans were $366.0 million at March 31, 2007, an increase of 27% from March 31, 2006. Total deposits were up 22% from March 31, 2006. Loans grew at an annualized rate of approximately 8% in the first quarter of 2007, as anticipated construction loan maturities offset a portion of new loans added in the quarter. Much of the loan growth occurred late in the quarter, and, therefore, its effect on net interest income was not significant in the first quarter. Total deposits decreased $5.4 million from December 31, 2006 due to seasonal factors affecting non-interest bearing deposits and the loss of a large commercial relationship. Net interest income for the first quarter of 2007 was up 21% over the first quarter of 2006, primarily due to the higher volume of loans. Compared with net interest income of $6,256,000 in the fourth quarter of 2006, first quarter 2007 net interest income was down $504,000 due to two fewer days in the 2007 period and a decrease in the net intere st margin.

The Company’s net interest margin was 5.64% in the first quarter of 2007, compared with 5.67% in the same quarter last year and 5.97% in the fourth quarter of 2006. The decrease in the net interest margin on a linked-quarter basis was primarily due to an increase in the cost of funds and a slight decrease in the average yield on earning assets. The average rate paid on interest-bearing liabilities for the first quarter of 2007 was 4.04%, compared with 2.77% in the first quarter of 2006 and 3.90% in the fourth quarter of 2006. The higher average cost of funds was the result of rising short-term interest

rates and enhanced competition for deposits in the Company’s markets. Mr. Fitzpatrick stated, “We expected loan growth in 2007 to moderate from the 2006 pace. Margin compression is a significant banking industry issue today, and we expect pressure on the funding side of the balance sheet to continue.”

The quality of the Bank’s assets continues to be strong. The provision for credit losses was $275,000 in the first quarter of 2007 compared with $405,000 in the first quarter of 2006 and $1,105,000 in the fourth quarter of 2006. Net charge-offs in the first quarter of 2007 were insignificant. The total allowance for loan losses was 1.31% as a percentage of loans outstanding at March 31, 2007, compared with 1.69% at March 31, 2006 and 1.25% at December 31, 2006. The allowance represented 422% of non-performing loans at quarter end. As of March 31, 2007, non-performing loans as a percentage of total loans were 0.31%, compared with 1.51% at March 31, 2006 and 0.32% at December 31, 2006. Non-performing loans at March 31, 2007 consisted of a single commercial loan. As a percentage of total assets, non-performing assets were 0.37% at quarter-end 2007.

Non-interest income in the first quarter of 2007 was $906,000, up 19%, compared with $761,000 in the first quarter of 2006. The increase in the first quarter of 2007 over the comparable 2006 quarter was primarily related to revenues from the Company’s international trade department, which began operations late in the second quarter of 2006, and an increase in service charges due to the higher number of deposit accounts.

Non-interest expenses in the first quarter of 2007 were $4.6 million compared with $3.7 million in the first quarter of 2006. The increase was primarily a reflection of the overall higher level of staffing, including hiring costs, merit increases and performance-based pay, occupancy, data processing and branch activities. These expenses were primarily due to loan growth, a de novo branch added at the end of the first quarter of 2006, and the expansion of the Company’s international trade finance capabilities. Non-interest expenses in 2007 also included $251,000 of stock-based compensation expense, compared with $38,000 and $23,000 in the first and fourth quarters of 2006, respectively. In addition, the Company recorded a $127,000 non-cash charge related to the Company’s interest rate hedges in the first quarter of 2007, compared with a credit to non-interest expense of $120,000 in the fourth quarter of 2006.

The Company’s efficiency ratio was 69.7% and 66.1% for the first quarters of 2007 and 2006, respectively, and 60.9% for the fourth quarter of 2006. The increase in the first quarter of 2007 related to the decrease in net interest income as well as the higher level of non-interest expenses as previously discussed. The Company’s leverage and risk-based capital ratios continue to exceed the “well-capitalized” requirements.

Cowlitz Bancorporation is the holding company of Cowlitz Bank, which was established in 1977. In addition to its four branches in Cowlitz County Washington, Cowlitz Bank’s divisions include Bay Bank located in Bellevue, Seattle, and Vancouver, Washington; Portland and Wilsonville, Oregon; and Bay Mortgage in southwest Washington. Cowlitz specializes in commercial and international banking services for Northwest businesses, professionals, and retail customers, and offers trust services in southwest Washington and Portland, Oregon.

Forward-Looking Statements

This press release contains forward-looking statements regarding the Company’s prospects for growth, the effect of local economic conditions and the Company’s non-interest revenues. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those discussed in this press release as a result of risk factors identified in the Company's Form 10-K for the year ended December 31, 2006, and other filings with the SEC. Specific risks in this release relate to whether local economic conditions will continue to be strong and the Company’s ability to continue to increase loans and non-interest revenues.

FINANCIAL HIGHLIGHTS
(Unaudited - $ in thousands except per share data)
INCOME STATEMENT					Quarter Ending
		March 31,			March 31,			December 31,
		2007			2006			2006
Interest income	$	8,768		$	6,396		$	9,080
Interest expense		3,016			1,633			2,824
Net interest income		5,752			4,763			6,256
Provision for credit losses		275			405			1,150
Net interest income after provision
for credit losses		5,477			4,358			5,106
Non-interest income		906			761			806
Non-interest expense		4,642			3,654			4,261
Income before provision for income taxes		1,741			1,465			1,651
Provision for income taxes		463			405			406
Net income	$	1,278		$	1,060		$	1,245
Earnings per share:
Basic	$	0.26		$	0.22		$	0.25
Diluted	$	0.25		$	0.21		$	0.24
Weighted average shares outstanding:
Basic		4,900,490			4,772,251			4,885,247
Diluted		5,176,599			5,012,247			5,141,564
Shares outstanding at period end		4,942,023			4,772,251			4,889,323
Efficiency ratio (1)		69.7	%		66.1	%		60.3	%
Number of full-time equivalent employees		138			122			135
(1) Non-interest expense divided by net interest income plus non-interest income.
					Quarter Ending
		March 31,			March 31,			December 31,
SELECTED AVERAGES		2007			2006			2006
Average loans	$	356,763		$	275,266		$	357,696
Average interest-earning assets		419,939			341,026			424,505
Total average assets		460,272			376,113			465,119
Average deposits		389,665			313,504			394,604
Average interest-bearing liabilities		302,502			235,432			289,777
Average equity		51,241			45,253			50,533

		March 31,			March 31,			December 31,
SELECTED BALANCE SHEET ACCOUNTS		2007			2006			2006
Total assets	$	465,050		$	382,567		$	468,395
Securities available for sale		56,298			54,309			57,688
Loans:
Real estate secured:
One to four family residential		26,521			27,747			27,460
Multifamily		15,577			11,307			16,285
Construction		77,003			52,350			72,606
Commercial real estate		108,616			115,646			117,992
Total real estate		227,717			207,050			234,343
Commercial and industrial		135,985			77,724			121,332
Consumer and other		3,207			3,220			3,486
		366,909			287,994			359,161
Deferred loan fees		(880	)		(646	)		(1,078	)
Loans, net of deferred loan fees		366,029			287,348			358,083
Goodwill and other intangibles		1,911			1,929			1,873
Deposits:
Non-interest-bearing demand		90,310			91,260			107,943
Savings and interest-bearing demand		86,375			95,181			95,861
Certificates of deposits		217,362			135,291			195,646
Total deposits		394,047			321,732			399,450
Borrowings		1,106			658			738
Junior subordinated debentures		12,372			12,372			12,372
Stockholders' equity		53,096			45,616			50,725
Book value per share	$	10.74		$	9.56		$	10.37
Tangible book value per share	$	10.36		$	9.16		$	9.99
Tier 1 leverage capital ratio (Q1-07 estimated)		13.82	%		14.91	%		13.24	%

			Quarter Ending
	March 31,		March 31,		December 31,
RATIOS ANNUALIZED	2007		2006		2006
Return on average assets	1.13	%	1.13	%	1.05	%
Return on average equity	10.11	%	9.37	%	9.63	%
Return on average tangible equity	10.51	%	9.84	%	10.01	%
Average equity/average assets	11.13	%	12.03	%	10.86	%
Yield on interest-earning assets (TE)	8.55	%	7.59	%	8.63	%
Rate on interest-bearing liabilities	4.04	%	2.77	%	3.90	%
Net interest spread (TE)	4.51	%	4.82	%	4.73	%
Net interest margin (TE)	5.64	%	5.67	%	5.97	%

TE - Tax exempt interest income has been adjusted to a taxable equivalent basis using a 34% tax rate.

		Quarter Ending
		March 31,			March 31,
ALLOWANCE FOR CREDIT LOSSES		2007			2006
Balance at beginning of period	$	4,825		$	4,668
Provision for credit losses		275			405
Recoveries		24			33
Charge-offs		(26	)		(12	)
Balance at end of period	$	5,098		$	5,094
Components
Allowance for loan losses	$	4,801		$	4,860
Liability for unfunded credit commitments (1)		297			234
Total allowance for credit losses	$	5,098		$	5,094
Allowance for loan losses/total loans		1.31	%		1.69	%
Allowance for credit losses/total loans		1.39	%		1.77	%
Allowance for loan losses/non-performing loans		422	%		112	%
Allowance for credit losses/non-performing loans		448	%		118	%
		March 31,			March 31,			December 31,
NON-PERFORMING ASSETS		2007			2006			2006
Nonaccrual loans	$	1,137		$	4,330		$	1,137
Other real estate owned and other foreclosed assets		606			-			622
Total non-performing assets	$	1,743		$	4,330		$	1,759
Total non-performing loans to total loans		0.31	%		1.51	%		0.32	%
Total non-performing assets/total assets		0.37	%		1.13	%		0.38	%